Plum Corporation will begin operations on January 1. Earnings for the next five years are projected to be relatively stable at about $80,000 per year. C corporations are taxed at 21%. The shareholders of Plum are in the 32% income tax bracket and dividends are taxable at 15%. Assume, if applicable, the qualified business deduction is available and not subject to any limitation or phaseout. If an amount is zero, enter " 0 , . When required, round your answers to the nearest dollar. a. Assume that Plum will reinvest its after-tax earnings in the growth of the company. If Plum operates as a C corporation, the corporation's income tax will bes V, and the shareholder's' liability will be If Plum operates as an 5 corporation, the corporation's income tax will be $ x. Therefore, viewed from an entity-owner perspective, operating as: will result in overall tax savings. Foodback T Check My Work A variety of factors, both tax and nontax, affect the choice of the form of business entity. The form that is appropriate at one point in the life of a entity and its owners may not be appropriate at a different time. Understanding the comparative tax consequences for the different types of entities and being able to opply them effectively to specific fact patterns can lead to effective tax planning. b. Assume that Plum will distribute its after-tax earnings each year to its shoreholders. If Plum operates as a C corporation, the corporation's income tax will be 1 X, and the shareholders' liability will be x If Plum operates as an 5 corporation, the corporation's income tax will be 1 and the shareholders' liability will be x Therefore, viewed from an entity-owner perspective, assuming that Plum distributes its after-tax earnings nach year, operating as will result in overall tax savings